Published : 7 years ago, on 13/04/2018

The preparation and issuance of a high level due diligence report is a crucial component to significant corporate transactions, in relation to, amongst others, Mergers, Acquisitions, public offering of securities, debt financing.

Legal due diligence is essentially the investigation into a company’s affairs and it is conducted by reviewing the Company’ structure and records, as well as all of the Company’s agreements, funding arrangements and constitutional documents. In the context of a legal due diligence the first step would be to conduct a search against the public files of the Company kept with the Registrar of Companies. The information extracted is then used to confirm whether or not to establish and whether the records of the Registrar are consistent with the Company’s records. Upon the finalisation of the investigation, a practicioner will invariably draft a report in which the practicioner shall list all the key findings that, in the practiconer’s view may assist the interested party, usually the potential buyer, to reach an informed decision in regards to the transaction in question.

Legal due diligence report may also be requested by the management of a company for the purpose of having a better understanding of the company and its value before entering into a merger or the sale of the business.

Moreover, it is crucial for any potential buyer to be able to have such report by having a full assessment of the possible legal risks and indication of the value of equity, assets and of course of any potential problems or liabilities that may arise in the future, before purchasing the company.

During the legal due diligence procedure, we are examining, amongst others, the following documents:

• Constitutional Documents (Memorandum and Articles of Association);
• Any documents affecting the shareholding structure;
• Share Certificates;
• Registrar of Companies corporate certificates;
• Powers of Attorney;
• Any documents associated with the Directors, Secretary and employees, if applicable, of the Company;
• Any documents in regards to acquisitions, investments, disposals and mergers;
• Commercial contracts;
• Funding agreements;
• Encumbrances;
• Employees;
• IP documents.

It is very important in a due diligence report to present the findings, describe all the reviewed documents, analyse the key issues and provide our comments, recommendations and/or solutions for any issues that might have arisen during the review process

We are able to offer high level legal due diligence report for Cyprus entities duly prepared by our team of experienced lawyers.